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TMI Blog2013 (5) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... ace PE (permanent establishment) in India in the form of project office is not in conformity with the binding decision of the abovesaid decision of Hon'ble jurisdictional High Court and thus there is mistake apparent from record in the order of the Tribunal. In support, he placed reliance on the decision of Hon'ble Supreme Court in the case of Asstt.CIT v. Saurashtra KutchStock Exchange Ltd. [2008] 305 ITR 227/173 Taxman 322. In that case, it has been held that non consideration of a decision of the jurisdictional High Court constitutes a mistake apparent from record, which can be rectified under s. 254(2) of the Act. The learned Authorised Representative pointed out the Hon'ble Court further went on to hold that even a subsequent decision of the jurisdictional High Court which sets a controversy to rest can be pressed into service to rectify an order under s. 254(2) of the Act. The learned Authorised Representative submitted that the applicant's case all along has been that the installation activity commenced after receipt of jackets in November, 2007 and hence no installation PE came into existence during the previous year under consideration. This submission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Authorised Representative made following submissions vis-a-vis the relevant pages made available in the paper book in support filed on behalf of the assessee before the Tribunal: "(i) 'Minutes of the meeting held on 2nd June, 2006, between ONGCa, the appellant and L&T, for project progress review, wherein presentation was made by Mr. M.J. Choi, the Vice President of the appellant, who had come from Korea to attend the meeting. The general manager of the project office, Mr. S.S. Park, only escorted Mr. Choi and Mr. M.S. Sahu, the project manager located abroad, to the meeting (see pp. 368-373 of the paper book). (ii) Minutes of the meeting held on 1st Nov., 2006, between ONGC, the appellant and L&T, which was attended by the appellant's representatives who had travelled from Korea for the meeting. No employee of the project office was present in such meeting (see pp. 360-367 of the paper book). (iii) Only two non-technical persons were employed in the project office. (iv) Only expenses of ₹ 41,25,887 were incurred by the project office towards general and administrative costs (see p. 519 of paper book)." 4. Learned Authorised Representative thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, of the Tribunal, the applicant has already preferred appeal before the Hon'ble jurisdictional High Court which is pending adjudication. He submitted that order of the Tribunal is comprehensive and reasoned one and if the application under consideration is allowed, it would be amounting to review of its order by the Tribunal which is not permitted under the provisions of s. 254(2) of the Act. He pointed out further that in the cited case of the Hon'ble jurisdictional Uttarakhand High Court in the case of BKI/HAM V.O.F. c/o Arthur Anderson & Co. (supra) the treaty in question was with Netherlands and is not a treaty similarly worded as in arts. 5(2) and 5(3) as in the present case with Korea. The Tribunal has held the applicant has PE after considering the related facts and submissions of the parties in detail. Thus there is no mistake apparent from record in the order of the Tribunal. There may be factual mistake in the order but the same is not going to affect the merit of the appeal submitted the learned Departmental Representative. The facts as per the record are that the applicant is a company incorporated in South Korea and is a tax resident of that county. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attribution of 25 per cent of the gross revenues from outside India activities to the alleged PE of the applicant. 7. So far as non-application of decision in the case of BKI/HAM V.O.F. c/o Arthur Anderson & Co. (supra) and alleged mistakes in para Nos. 77 and 64 of the order of the Tribunal are concerned, having gone through the order dt. 30th Aug., 2011 of the Tribunal in view of the above submission of the parties, we do not find any mistake in the order claimed to be apparent from record to justify the invocation of the provisions laid down under s. 254(2) of the Act to rectify the same. 8. The fact of the case in the case of BKI/HAM V.O.F. c/o Arthur Anderson & Co. (supra) cited by the learned Authorised Representative are distinguishable from the case of the assessee, in that case the treaty in question was with Netherlands and is not a treaty similarly worded as in arts. 5(2) and 5(3) as in the present case with Korea. In the present case, considering the facts and circumstances of it as well as different articles of the treaty between India and Korea, the Tribunal has come to the conclusion that Mumbai project office of the assessee was opened on 24th May, 2006 on the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention of the assessee in the preceding paras as well as in para Nos. 23, 39, 55 and others all along on the issue of date of installation PE remained that the project of the assessee had come into existence on 24th May, 2006 on receipt of the approval of the RBI vide letter dt. 24th May, 2006 and the installation PE of the assessee came into existence only after 17th Nov., 2007 when the jackets were brought to the offshore site for installation. We thus find substance in the contention of the learned Authorised Representative that there is mistake apparent in para No. 20 of the order of the Tribunal in recording the submission of the assessee that assessee's installation PE came into existence on 24th May, 2006, we thus are of the view that rectification of mistake to this extent is required to be made under the provision of s. 254(2) of the Act. We thus rectify the mistake to this extent and after rectification of this mistake the sentence in para No. 20 of the order will now be read and understood as "It was submitted that the contract in the present case was concluded on 28th Feb., 2006 as against that assessee's installation PE came into existence on 17th No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Authorised Representative submitted that relevant documents in the paper book of the assessee were made available in evidence in support. Hence the above observation of the Tribunal in para No. 77 of the order constitutes mistake apparent from record which may be rectified. In para No. 3 of the present order hereinabove those documents have been mentioned which as per the applicant were made available in the paper book filed before the Tribunal. Having gone through the contents of para No. 77 of the order we find that the observation of the Tribunal that no material has been brought on record by the assessee so that its Mumbai office does not have any role to play in the execution of contract to accept the arguments of the assessee that the Mumbai project office has carried out only preparatory or auxiliary activities so as to bring the PE of the assessee under exclusionary art. 5.4, has been concluded with this finding that the way the terms of the contract are described and the way the work on contract has to proceed clearly describe that in all the activities of contract there may be the role of Mumbai project office as to same has to work as a channel between the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake in para No. 77 of the order apparent from record which needs rectification under s. 254(2) of the Act. The contention of the assessee in this regard is accordingly rejected. 11. Yet another mistake pointed out in the order apparent from record as per the learned Authorised Representative is in para No. 64 of the order, wherein the observation of the Tribunal is that the revenue recognized by the assessee is relating to hook up and commissioning, insurance and pre-engineering survey. As per the learned Authorised Representative it gives the impression as if the applicant has earned income from ONGC during the relevant previous year for providing services relating to hook up and commissioning, insurance and pre-engineering survey which is not the case of the assessee. He submitted that it was never the contention of the applicant that it had received revenue in respect of hook up and commissioning, insurance and pre-engineering survey which has been recognized as their income. In fact the aforesaid items are cost and expenses and not the income. The learned Authorised Representative submitted that submission of the assessee remained that it had recognized revenues in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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